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There are many loan options available to purchase your new home.
One item that you should keep in mind though is your ability to offset your current mortgage payment with rental income. If you have a rental agreement in place to rent your current home when you purchase your new home, you might be able to treat the current mortgage as if it isn't there. This will allow you to purchase a more expensive new home.
There are however underwriting guidelines that have to be met when converting your primary residence into an investment property. Traditional underwriting guidelines require that you have 30% equity in your current home before you can offset your current mortgage payment with your rental income. If you do not have the 30% equity supported by an appraisal of the home, then you will have to qualify for your new home loan while carrying your old loan in your ratios.
Due to the many issues you have in your individual scenario, I'd suggest that you reach out to one of us to get pre-qualified for your new home loan. This will let you know what priced new home you qualify for. We look forward to discussing your individual scenario when you call.
Eric and Michael gave you excellent information. It's very important that you reach out to one or all of us to compare costs and rates to see what we can do. I would try and get 3-5% and go conventionally to avoid all the mortgage insurance that FHA requires.
All of us can and will help you, so just email or call and we can get to work on your behalf.
Thanks,
Brent
Answer #1
Good afternoon and thank you for your inquiry. Unfortunately, I would need to know a little bit more information in order to answer your question completely and accurately. Now, Depending on your equity position of your current property that you will now be renting, you may regain partial VA eligibility.
However, the VA is not going to let you do 100% financing again on the new property. If the down payment is the driving force behind your line of questioning, you can always obtain a loan secured by the Federal Housing Administration (FHA) which only requires a 3.50% down payment.
I certainly hope this gives you the information you need or at least pointed in the right direction. Please feel free to contact me directly to further discuss your specific details.